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Cryptocurrency predictions 2021: will the growth continue?

By Ankish Jain

10:22, 3 May 2021

Cryptocurrency predictions 2021

The meteoric increase in the value of Bitcoin has positioned cryptocurrencies at the forefront of investors’ attention. Bitcoin is currently the largest cryptocurrency, with a market capitalisation of $1trn. Although Bitcoin is the number one cryptocurrency, there are currently over 10,000-plus cryptocurrencies in use.

Several digital currencies have outperformed returns on Bitcoin. For example, Ethereum, the second-largest cryptocurrency with a market cap of more than $300bn, has increased by 750% since 2020, surpassing Bitcoin's 600% gain. 

This article will cover cryptocurrency predictions for 2021 and analyse current market sentiments, investor participation, and other key factors driving the cryptocurrency market.

Blockchain wallet users November 2011– April 2021

Cryptocurrency highlights 2021

  1. Gemini, a cryptocurrency exchange, has unveiled a cryptocurrency rewards credit card in collaboration with Mastercard and WebBank. The Gemini Credit Card will be available in the Summer of 2021. It is one of the most fascinating developments in the cryptocurrency world.

  2. Tesla Inc. founder Elon Musk tweeted about Dogecoin, causing the coin’s price to rise 254% in less than 24 hours. The meme cryptocurrency reached an all-time high of $0.45 on April 16.

  3. The Pittsburgh Pirates (an American professional baseball team) has collaborated with crypto-industry veteran VanEck Associates Corp.’s Gabor Gurbacs on a rewards-based platform to capitalise on the growing desire for more digital-focused experiences..

  4. Binance, the world's biggest crypto exchange by trading volume, announced plans to launch its own platform for nonfungible tokens (NFTs). 

  5. Turkey's central bank has outlawed the use of cryptocurrencies and crypto-assets, such as Bitcoin, to buy products and services, citing the possibility of "irreparable" disruption and significant transaction costs. On Friday, the bank published regulations in the Official Gazette stating that cryptocurrencies could not be used as a payment instrument, either directly or indirectly.

Traders sentiment analysis and crypto forecasts

There has been an escalation in cryptocurrency investments in recent months. With banks and institutions gradually adopting it, as well as Coinbase’s listing on the Nasdaq stock exchange, it’s easy to believe that crypto trade volumes could continue rising. 

According to JP Morgan, institutional investors see Bitcoin as a digital alternative to gold, which has long been regarded as a conventional hedge asset. Grayscale Bitcoin Trust (GBTC) investment inflows have risen, while gold ETF investment has remained nearly unchanged. 

JP Morgan’s crypto market forecast forecasts a huge move from gold to cryptocurrency. This makes sense, given that cryptocurrency is a technologically advanced inflation shield, while fiat currency will continue to bear the brunt of the pandemic’s effects.

According to CoinDesk’s report, retail investors are finally showing signs of interest. That could lead to more bull run cycles in the near future. Shaped by bullish sentiments and rising awareness among retail investors, what crypto will explode in 2021?

Retail vs institutional bitcoin flows

Cryptocurrency predictions 2021: best altcoins to watch

  1. Ethereum (ETH): This digital token was launched in July 2015 at a trading price close to $2. It has risen more than 129,900%. ETH is currently trading at a price of nearly $2,600, making it one of the most profitable cryptocurrencies. On Tuesday, Ether reached new highs after smashing through the main resistance level of $2,500. Even as Bitcoin fell, Ether's intermediate-term momentum remained positive. The cryptocurrency's long-term momentum remains bullish.

  1. Cardano (ADA): Cardano (ADA) is currently the seventh-largest cryptocurrency with a market cap of almost $40bn. Since its inception, ADA has risen by 6,250%. It is currently trading at $1.27. The successful launch of future Cardano updates appears to be a positive for the ADA price. Any delays in the release of ETH 2.0 could prompt developers and consumers to switch to Cardano instead of ETH 2.0 to avoid high gas costs, resulting in increased demand for ADA, making it one of the best cryptos to invest in 2021.

Cardano/USD

  1. Ripple (XRP): Ripple (XRP) is the fourth-largest cryptocurrency project in terms of market capitalisation, with a total market valuation of $61bn. Due to the large number of coins in circulation (over 45bn), a single unit of XRP is relatively inexpensive. Compared to the other top 10 projects in the market, the significantly lower price-per-coin could attract visitors deciding which crypto to invest in this year.

Ripple/USD

Biggest supporters and holders of cryptocurrency

  1. The Winklevoss Twins: The Winklevoss Twins are among the top ten cryptocurrency billionaires. The twins spent $11m in 2013 to purchase 1.5 million Bitcoins. At that time, a single Bitcoin cost $120. Their Investment has grown by more than 45,000%. The twins are said to own 1% of all Bitcoin on the market. They created Windex, invested $1.5m in BitInstant and have funded other Bitcoin-related businesses.

Winklevoss Twins

  1. Chris Larsen: Chris Larsen, a Silicon Valley executive best known for co-founding several tech start-ups, is one of the most prominent cryptocurrency investors and supporters. Larsen is co-founder and executive chairman of Ripple. According to Forbes, Larsen owns 5.19 billion Ripple units.

Chris Larsen

Gold

2,338.64 Price
-0.960% 1D Chg, %
Long position overnight fee -0.0195%
Short position overnight fee 0.0113%
Overnight fee time 21:00 (UTC)
Spread 0.80

US100

18,685.80 Price
-1.060% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 7.0

BTC/USD

67,681.60 Price
-0.920% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

XRP/USD

0.53 Price
-0.610% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168
  1. Michael Saylor: The CEO of software company MicroStrategy made and lost a fortune during the first dot-com crash. Saylor's net worth has risen to $2.4bn due to his early investment in Bitcoin. On MicroStrategy's quarterly earnings conference call in July 2020, Saylor revealed his intention to buy Bitcoin, gold or other alternative assets instead of cash. The next month, MicroStrategy purchased 21,454 Bitcoins with $250m from its cash reserve.

Michael Saylor

Biggest сritics of сryptocurrency

  1. Nouriel Roubini: Nouriel Roubini, an economics professor at Stern School of Business, is one of the world’s most outspoken crypto critics. He argues that “cryptocurrency as a technology has absolutely no foundation for success”. He has remained a vocal opponent of crypto and Bitcoin in 2020, despite accepting in late 2019 that BTC “might be a partial store of value”.

Nouriel Roubini

  1. Peter Schiff: Peter Schiff, a multi-millionaire broker and CEO of Euro Pacific Capital, is another well-known Bitcoin sceptic who has been critical of the cryptocurrency since 2013. Schiff is known in the crypto community as a “gold bug” and is one of the world’s leading supporters of gold investment. Schiff made several negative and divisive comments regarding Bitcoin in 2020, predicting that gold would skyrocket while Bitcoin would crash in the foreseeable future. Surprisingly, Peter Schiff’s son, Spencer Shiff, has invested entirely in the cryptocurrency market.

Peter Schiff

Crypto price predictions 2021: analyst views

Predicting cryptocurrency prices, Thomas Fitzpatrick, a senior analyst at Citibank, produced a study that drew parallels between the gold market in the 1970s and Bitcoin. He used technical analysis of prior highs and lows to assess a target of $318,000 for bitcoin by December 2021.

According to Coinpedia’s crypto predictions 2021, Ethereum may continue to be in a bullish cycle and trade between $4,000 and $5,000 at the start of 2022. With some variations during the year and focusing more on Ethereum innovations, the price of ETH could spike dramatically and reach $6,000 by the end of 2022.

The cryptocurrency industry is a melting pot of technological breakthroughs. Many cryptocurrencies with high utility and functionality, such as the DeFi sector coins and NFT tokens, shake the market on a regular basis. These ground-breaking developments have the potential to disrupt the industry in the coming years, with numerous cryptocurrencies increasing their popularity among retail and institutional investors.

Cryptocurrency market capitalisation

Bottom line

Bitcoin has clearly defined itself as a lucrative investment. However, since the cryptocurrency market is inherently unpredictable, diversification and risk management are essential to earning a positive return on investment.

Investors are always looking for the next big thing, or something even more valuable than Bitcoin. It's popular to look at cryptocurrency market performance and market dynamics to figure out which cryptocurrency is the best to invest in 2021.  But price isn't the only factor to consider. Investors should take a closer look at the digital currency's functionality and adoption rates. If a cryptocurrency is useful, it can overcome many barriers.

Another thing to consider is scarcity. If a currency's supply is not limited, it can lose value over time if demand outstrips supply, resulting in inflation. Bitcoin, for example, has grown in popularity because it cuts out middlemen from transactions and functions as a deflationary asset with a total supply of just 21 million BTC.

Although cryptocurrency price predictions differ, if a cryptocurrency is transparent, has a clear objective, solves a business problem, and is supported by a reliable network and team, it has a better chance of succeeding in the long run.

Read more: Best cryptocurrency to invest in for May 2021: no BTC included

Markets in this article

BTC/USD
Bitcoin / USD
67681.60 USD
-630.35 -0.920%
ADA/USD
Cardano / USD
0.45639 USD
-0.00401 -0.880%
ETH/USD
Ethereum / USD
3776.41 USD
-50.75 -1.330%
JPM
JPMorgan Chase & Co (Extended Hours)
199.25 USD
-1.82 -0.910%
XRP/USD
Ripple / USD
0.52961 USD
-0.00319 -0.610%

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